SUPERMARKET group Somerfield yesterday conceded the pace of its recovery had not been fast enough, despite posting a 24% rise in underlying profits.

SUPERMARKET group Somerfield yesterday conceded the pace of its recovery had not been fast enough, despite posting a 24% rise in underlying profits.

The Bristol-based group, which has around 1300 stores - including 700 Kwik Save outlets - achieved profits of &#xA3;25.8m after like-for-like sales improved 1% in the year to April 26.

Chairman John von Spreckelsen, who took on executive duties in October, said he now expected sales growth to gather momentum on the back of investment.

He has pledged to accelerate a store refit programme, with many larger Somerfield stores being downsized to give the chain an average shop size of 6,000 sq ft in a bid to improve profitability.

Excess space will be sub-let to complementary retailers.

Mr von Spreckelsen said, "While we are pleased to report further progress in rebuilding profitability, we recognise that the pace of recovery was not fast enough.

"However, following organisational changes, we have a strong executive management team focused on delivering the renewal of the company with urgency and pace."

He said the group was already seeing good returns from stores where investment had taken place. He expected sales to "gather momentum" as the investment continued.

During the new financial year, the group expects to refurbish up to 100 Somerfield stores at a cost of &#xA3;70m, with 50 Kwik Save shops due for &#xA3;35m of refit work.

Somerfield has been involved in a battle to win back market share after hitting problems integrating Kwik Save, which it acquired in 1998.

It was also recently the subject of a rejected &#xA3;594m takeover bid by retail entrepreneurs John Lovering and Bob Mackenzie.

New estimates on the value of the Somerfield estate helped explain why the board turned down the approach.

The group said a revaluation of 121 stores produced a potential gain of &#xA3;147m - a rise of 55% - on their book value, while the remainder of the estate is estimated to show an uplift of &#xA3;110m or 19%.

With final pre-tax profits rising 57% to &#xA3;34.8m because of a &#xA3;9m gain on property disposals, shareholders can look forward to a 65% higher total dividend of 1.65p a share.